Residual Income, Residual Impact

An Upline Classic


John David Mann

John David Mann

he concept of residual income evolved from a number of different areas. First, residual income itself means "left over"; residual income is left over from one's initial efforts. A similar concept -- and one which is a little more clear and well known by the general public -- is the idea of earning royalties. A royalty is income that is paid for a duplicated effort. If you were to create a popular song, every time a record was sold or your song was played or performed, you'd receive a royalty payment. Although your initial effort in creating the song was expended some time ago, as long as it's being sold -- through performance, record sales, or some other form of use, such as the sound track of a film or TV commercial -- you earn the royalty. Authors, inventors, actors, and performers of many kinds earn ongoing royalties for their work.

The concept originated with the monarchy. Kings and queens -- royalty -- were paid "royalties" for a variety of things: land they owned, tribute, use of resources under their control, services they provided -- such as an army -- or just for being monarchy.

Residual Income

In Network Marketing, residual income is, of course, income you continue to earn based on your initial business building efforts. Because income in legitimate Network Marketing can only be earned as a commission of the overall sales of products or services, the residual income you earn is based on the sales of the Network organization you helped create and develop.

Obviously, residual income is desirable, because, like the songwriter's or author's earnings, it's an income stream which continues long after you've completed your initial efforts. In other words, you no longer have to do anything to generate it. The checks keep coming as long as sales are being made.

Equally obviously, there are some conditions that must exist for you to earn residual income: 1) The company (who issues your "royalty" checks) must remain in business, and 2) The products or services must continuously generate repeat sales.

Because we are not compensated for the act of recruiting, it's not enough to base your future income on more and more new people coming into the program. The phenomenon of front loading was created in part to make up for poor repeat sales potential. Residual income must come from legitimate sales made by men and women in your group.

The favored choice for residual income in Network Marketing is a consumable in demand, with the ongoing support of successful new product development. Now, that handles concern number two -- repeat sales and therefore continued income. How do you handle number one -- the company staying in business so you can get paid?

There are many reasons for a company failing in Network Marketing. Poor initial capitalization, incompetent management, lack of leadership development, lack of training, short-lived and poorly positioned products, etc. Some of these you can do nothing about. Of course, picking the right company to begin with helps, but even then there are no guarantees.

The foremost reason companies fail -- over which you do have control -- is marketing. That is the distributors' job. That is why distributors are so well paid. From the marketing perspective, the future of the company is in your hands. And what the marketing future depends upon most is called residual impact.

Residual Impact

In a very real sense, residual impact is just like the residual income writers, artists, inventors, and performers have, only in this case it's the impact of their work, not their income.

To have an impact, one must influence with power and velocity. The impact of the industrial revolution is an example. Residual impact continues long after your initial efforts have ceased. For a writer, it would be authoring a best-selling book or even a classic. Without being glib, you could say the Bible is a perfect example. Written over 2000 years ago, it has influenced with power and velocity more people than any other book in history.

There are pieces of music composed generations ago that are as alive and moving as the day they were created. Bach, Beethoven, and the Beatles have all given us the residual impact of their music. Obviously there are many others.

Just as obviously, there are many examples of performances, like Bogart and Bergman in Casa Blanca, and inventions, like the light bulb or the computer, which have had and will continue to have an enduring residual impact on millions of people.

Earning Residual Impact

You earn residual impact the same way you earn residual income, by investing your time, energy, and effort in other people.

What's the primary benefit of Network Marketing over direct or conventional sales? Residual income, right? Yes -- and the same is true of residual impact. By enrolling, training, and leading a Network of men and women to success, you have a direct residual impact on their lives and work, the lives of their children and other family and friends, the lives of countless retail customers who benefit from the product, and the lives of all of the future generations of men and women they will sponsor.

Residual impact takes many forms. Each one serves by making a positive (even life-changing) difference in people's lives.

In addition, as the Network Marketing industry expands and prospers, you will play a part in bringing to light a major shift in the way of life and work in our world.

Too much? Not really.

Imagine the powerful model of "can-do-ness" President Kennedy thrust into the American consciousness when he declared the country's intention to put a man on the moon within ten years. Everybody enrolled in that dream. The entire nation watched its progress with interest and ownership. When the deed was done, we felt the pride of our own accomplishment. That's the residual impact on a national, even global scale.

Showing the world how Network Marketing honors people's values and purpose as no other industry in history has, proving that ordinary people can live extraordinary lives, offering the world a model for personal and financial freedom, smashing the "glass ceiling," marshalling the most powerful and progressive system of sales and distribution of goods and services in the world, providing much needed leadership for the future -- all are powerful parts of models of possibility for a world in great need of all that is good and true about our industry.

Again, residual impact on a global scale.

Multi-Level Hamarabi

The "Code of Hamarabi" is "an eye for an eye and a tooth for a tooth." Some call it tit-for-tat. Unfortunately, most consider it bad news -- it's conditional, they say, and that's not good.

However, the other point of view considers it "justice." It happens anyway, so they say, so why not take control of the situation and give back in equal or greater measure to what you receive? Why not indeed?

Residual impact generates residual income which generates greater residual impact which gives you more residual income and so on. Front and back of the same coin. Both are legal tender in Network Marketing, both are at once your reason and reward.

For some people, successful Network Marketing is about making a lot of money.

For some people, successful Network Marketing is about making a lot of difference.

For some people, it is about both.

For those people, earning residual income and residual impact is what creates their financial and personal freedom.

We call those people "leaders."

-- JDM

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Reprinted with permission from Upline, Last Word - January 2000, 888-UPLINE-1,


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